Harmonic : Earnings Conference Webcast (q1 2025 harmonic earnings conference call)

Published: 2025-05-07 04:16:08 ET HLIT

Published on 05/07/2025 at 04:16

FIRST QUARTER 2025

Nimrod Ben-Natan, President & CEO Walter Jankovic, CFO

April 28, 2025

BROADBAND & VIDEO

Two market-leading

business units

Q1 2025 REVENUE

$133.1M

Broadband: $84.9M

Video: $48.3M

SILICON VALLEY

Headquarters

CLOUD NATIVE INNOVATION

LEADER

MARKET CAPITALIZATION1

$1.0B

MARKET-LEADING CUSTOMERS

Worldwide

Revolutionizing Broadband Networks and Cloud Streaming

1 Market Capitalization as of April 25, 2025

Delivered on

Q1 2025 Commitments

Broadband revenues in-line and profitability exceeded expectations

Video exceeded revenue and Adj. EBITDA expectations as the business gains momentum

Navigating Tariffs &

Shift to Unified DOCSIS 4.0 in 2025

Below revenue trend year expected in Broadband due to Unified 4.0 timing and potential tariff sensitivity

Technology and market share leadership position on Unified 4.0, progress to date as expected

Leading with a

Strong Operating Model

Robust cash flow in Q1 2025 resulting in cash balance

of $149 million

$36 million in Q1 2025 share repurchases

Positioned for

Above Market Trend Growth in 2026

Expect resumed revenue growth in 2026 with Unified

4.0 and existing customer ramps

Dell'Oro analyst report* supports future long-term

growth outlook

* S ource: Dell'Oro Gr oup, Janu ary 23 , 2025

Accelerate the adoption of next-generation, virtualized broadband networks for speed, reliability, and simplicity, over DOCSIS and Fiber

Seven new customer wins in Q1 including two

US Tier-1 cable operators

Strong Rest of World (ROW) bookings in Q1

ROW significant growth expected in 2025

Customer Diversification

DOCSIS 4.0 Unified Core and Devices

(FDX & FDD)

cOS platform orchestrating all formats of

DOCSIS and Fiber

Differentiated fiber offering with our Open ONU, versatile OLT, and virtual platform

Technology Leadership

ROW wins included a LATAM Tier 1 Telco

and two other new customers

Record Fiber bookings in Q1

Fiber Growth

58% year-over-year growth in Q1 with this SaaS

offering

Beacon Speed Maximizer now deployed with

eight customers

Cloud Services Expansion

PRODUCTION &

PLAYOUT

DISTRIBUTION

TRANSFORMING BROADCAST TV

Leading Video Appliances

Unified signal for all viewers

24/7 linear channels

Mature segment with "Broadcast" standards

Leading Agnostic Video

SaaS Provider

ENABLING PREMIUM STREAMING

SPORTS STREAMING

TV EVERYWHERE

VOD

Dedicated stream per viewer including targeted ads

On-demand viewing

Growing and evolving

HYBRID SOLUTIONS IN DEMAND

Winning and executing on increased level of larger refresh deals

Strong pipeline of opportunities

Demonstrated strong margins in Q1

Appliance Profitability

Q1 SaaS revenue $14.8M

Expansion of sports streaming with

existing customers

Strong Tier 1 Pipeline

Expected 2025 growth

SaaS Transformation

Strong Operating Leverage

FIRST QUARTER 2025

Walter Jankovic, CFO

CONSOLIDATED RESULTS

Revenue of $133.1 million, up 9.1% to prior year

EPS of $0.11, up $0.11 from

prior year

Cash $148.7 million, up

$47.3 million from Q4'24

BROADBAND RESULTS

Revenue of $84.9 million, up 7.6% from prior year

Adj. EBITDA of $15.9 million,

up 52.9% from prior year

VIDEO RESULTS

Revenue $48.3 million, up 11.8% from prior year

SaaS revenue $14.8 million, up 15% from prior year

Adj. EBITDA $5.3 million, up $11.7 million from prior year

* Non-GAAP

CAPITAL ALLOCATION PRIORITIES

Organic Growth

$200M Stock Repurchase Authorization

Inorganic Expansion Opportunities

ROW growth investments

Working capital for growth

Additional service offerings

$36M in stock repurchases

during Q1 2025

Expected strong free cash flow over next 3 years

Leverage our growing

footprint in Broadband

Strong Liquidity Position with $149M in Cash and $82M in Undrawn Credit Facility

Financial Metric

($ Millions)

2025

2024

Q1/Q4

Change

Q1 Y/Y

Change

Total Net Revenue

$133.1

$222.2

$122.1

(40.1)%

9.1%

Broadband Revenue

$84.9

$171.0

$78.9

(50.4)%

7.6%

Video Revenue

$48.3

$51.1

$43.2

(5.6)%

11.8%

Gross Margin (%)

59.4%

56.1%

52.5%

3.3%

6.9%

Broadband Gross Margin (%)

55.5%

52.7%

47.5%

2.8%

8.0%

Video Gross Margin (%)

66.4%

67.4%

61.6%

(1.0)%

4.8%

Financial Metric

$ Millions (except EPS)

2025

2024

Q1/Q4

Change

Q1 Y/Y

Change

Operating Expenses

$60.5

$61.5

$62.8

$(1.0)

$(2.3)

Adj. EBITDA

$21.1

$71.8

$4.1

$(50.7)

$17.0

Broadband Adj. EBITDA

$15.9

$64.1

$10.4

$(48.2)

$5.5

Video Adj. EBITDA

$5.3

$7.8

$(6.4)

$(2.5)

$11.7

EPS

$0.11

$0.45

$0.00

$(0.34)

$0.11

Share Count

117.0

117.7

118.1

(0.7)

(1.1)

Bookings

$113.7

$150.0

$146.1

$(36.3)

$(32.4)

Book to Bill Ratio

0.9

0.7

1.2

0.2

(0.3)

Financial Metric

($ Millions)

2025

2024

Cash

$148.7

$101.5

$84.3

Cash Provided by Operations

$83.6

$48.5

$26.8

Free Cash Flow

$81.7

$46.2

$24.9

Accounts Receivable

$98.6

$178.0

$105.9

DSO

Inventory

$62.1

$64.0

$86.6

Inventory Days

103

134

Backlog and Deferred Revenue

$485.1

$496.3

$677.8

Financial Metric

Broadband

Video

Consolidated

Net Revenue ($M)

$75 - $85

$45 - $50

$120 - $135

Gross Margin (%)**

44.0% - 45.0%

63.0% - 64.0%

51.1% - 52.0%

Adjusted EBITDA ($M)

$2 - $6

$2 - $4

$4 - $10

Shares***

n/a

113.7 - 113.7

EPS

n/a

$0.00 - $0.04

*Non-GAAP

** Includes estimated tariff impacts of approximately $3 million

*** Diluted shares assumes stock price at $11.04 (Q1 2025 average price)

Q1 2025 Exceeded Expectations

Navigating 2025 Broadband & Tariff Headwinds

Growth Rebound Expected in 2026

KEY LONG-TERM CATALYSTS

Technology leadership positions

Strong operating model

Proven execution

In establishing operating budgets, managing its business performance, and setting internal measurement targets, the Company excludes a number of items required by GAAP. Management believes that these accounting charges and credits, most of which are non-cash or non-recurring in nature, are not useful in managing its operations and business. Historically, the Company has also publicly presented these supplemental non-GAAP measures in order to assist the investment community to see the Company "through the eyes of management," and thereby enhance understanding of its operating performance. The non-GAAP measures presented here are gross profit, operating expenses, income (loss) from operations, non-operating expense, net, Adjusted EBITDA, net income (loss) and net income (loss) per diluted share. The presentation of non-GAAP information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP, and is not necessarily comparable to non-GAAP results published by other companies. A reconciliation of the historical and forward-looking non-GAAP financial measures discussed in this presentation to the most directly comparable historical and forward-looking GAAP financial measures is included with the financial information contained in this presentation. The non-GAAP adjustments described below have historically been excluded from our GAAP financial measures. These adjustments are restructuring and related charges, stock-based compensation expense, lease-related asset impairment and other charges, non-cash interest expenses on convertible notes, adjustments that normalize the tax rate and depreciation.

(UNAUDITED, IN THOUSANDS, EXCEPT EPS AND PERCENTAGES)

(UNAUDITED, IN THOUSANDS)

(UNAUDITED, IN MILLIONS, EXCEPT EPS AND PERCENTAGES)

(UNAUDITED, IN MILLIONS)

Disclaimer

Harmonic Inc. published this content on May 06, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2025 at 07:49 UTC.